Do you think, perhaps, Ben Bernanke, Federal Reserve Chairman, being a student of the Great Depression, has learnt valuable lessons about money supply, for example, and implemented this (by saving the financial system), saved a much larger portion of the economy from running into problems, requiring bail-out?

Also (to the point):

Europe had much lower job losses than the US in the immediate aftermath of the Lehman Brothers collapse. Western Europeans have had far less incentive to deleverage than their American peers.

Yet more evidence that European "premature austerity" has been a disastrous failure. In the US we can be grateful that President Obama did not "do a Cameron," as advised by the late columnist David Broder.

However, if the Eurozone continues its folly the US economy will be inevitably damaged. The only person who can prevent Mr. Obama's re-election is Angela Merkel.

Is that supposed to include the shadow banking system and the unregulated hedge funds? If so, how can you tell what's there?

Likewise, no mention of 'toxic assets' bailout of the US banks while US citzens fend for themselves? Don't be fooled. Two-thirds of our economy is consumer spending, but consumers are broke. The US 'recovery' is based on yet more failed voodoo economics that solved little & trickled down to very few.

Consumers are not broke at all. I see people buying houses using all cash, others are buying them with mortgages. I see people retiring with plenty of savings to live a very nice life. I just rented an apartment out. I rented it for more than a year ago and with far more applicants.
The sky is not falling. It fell already. Things are getting better much faster than the press is giving it credit for.
I'm believe Mr. Buffett 100% when he says that all businesses he owns are increasing sales and profits.

Until politicians realize they cant just spend and spend forever any mount for any reason they can imagine there will never be an end to these recessions and other financial problems caused by the governments. It is not to much borrowing, it is too much spending. Yes, if the economy grows debt is reduced but not because of reducing spending it is simply because more money is made by the private sector. Since governments NEVER actually reduce spending, they always raise spending, it is certain in the future another recession and associated problems will reappear. This is because government will always raise spending faster than the economy can keep up with it.
So if Europe and America want to end the financial crisis, end the recession, encourage growth and make future recessions smaller or even eliminate them, the politicians must keep their pillaging below what can be sustained.

Borrowing or taxing has the exact same effect on the economy, money taken from the private sector. Especially in these ridiculous unfair taxing schemes which results in only the well off paying most taxes, these are also the same people who buy bonds, so tax or borrow, it is the same effect, less money in the private sector, more in government and money in the government is an anchor to avoid.

There are legitimate government expenses. For example, it is cheaper and more effective to have a centrally paid for military when compared to each person or company providing its own militia or security force. A private militia is more expensive and if attacked ineffective resulting in total loss. A central government doing this is legitimate because it really does cost less and is more effective and in capitalism the goal is to pay for the most effective ways to produce wealth or mitigate loss. When government starts doing welfare, or sticks their nose in where it doesnt belong, they care costing more money than if a person does it on their own, creating an anchor that will eventually kill an economy.

Europe needs to end the socialism, politicians not spend so much and the people in those countries need to work and produce for themselves, not take government handouts.

America is on the path to europe, end the government handouts to the lazy parasites and that include people on welfare or crony capitalists who make money from working scams with politicians.

Lol, horrible because I said politicians should not spend and spend and spend everyone else's money and I point out the simplicity of what Capitalism is? You must be one of the sheep who likes having the government steal from others to give you a pittance. Guess what, you dont have the right to fruits of my or anyone else's labor, nor do you have the right to vote in politicians to pillage my money on your behalf.

Jesus, kid. Or at least you think like one. EVERY non-ideologue study (including the IMF) shows the near-term state austerity kills the economy. Or at least the real economy of main street as opposed to the only financial one. What do you think will happen when a Mr. Budget-cutter USA gets elected and leaves the common man out in the cold while subsidies to the (non)investors continue.

Maybe you should read the Constitution or perhaps some comments from founders like Madison stating no where in the Constitution does it say congress has the right to spend the fruits of everyone's labor in the name of benevolence. All spending needs to be cut that is not legitimate and that includes subsidies to investors as you state.
This is not complex stuff. SOCIALISM does not work and no amount of spending by governments anywhere is going to make it work. So how about the government stop taking everyone's money beyond the little they should and leave everyone not in the cold but free to pursue life as they see fit and to the degree they are able to succeed at based on their own skills and determination. How many decades of politicians claiming to "help" the "common" man while instead screwing everyone does it take before you morons realize the current governments and politicians are the damn problem. It is not me, you, evil companies or anyone else. Government is the problem, always has been the problem, created the problem and will always be a problem. It has been for the decades I have been alive and it was a problem before then and still is.
If Europe or America wants to NOT suffer recessions and huge unemployment, destitution to the degree we are seeing, the government needs to spend less money, it is simple as that. Sorry you people are too stupid to understand simple logic, simple definitions and simple concepts like Constitution or capitalism.

america faster recovering than europe??
bwahahahahahahaha......
faked numbers & statstics, qe number x - do you realy
believe anybody buys that?
the $ would be in freefall if -well- if thr world wouldn't
know the amount of american armory and the ruthlessness of
the us elites....
ww III anybody?

Why? very simple !! because the US Federal Reserves pumps as much money as it wants (from thin air) into the economy and increases the debt as it pleases without any control while the ECB refuses to do that because they believe in sound monetary system.

'ECB refuses to do that because they believe in sound monetary system.'

Assuming that this is true, that does not explain why European business and consumers are not saving/tightening their belts like their American cousins are.

Also, considering the low interest rates on loans the ECB was giving out to bankers/investors in econcomies drastically overheated like Ireland, Portugal, and the like, it is a stretch to say the ECB believes in "sound monetary system".

'ECB refuses to do that because they believe in sound monetary system.'

Assuming that this is true, that does not explain why European business and consumers are not saving/tightening their belts like their American cousins are.

Also, considering the low interest rates on loans the ECB was giving out to bankers/investors in econcomies drastically overheated like Ireland, Portugal, and the like, it is a stretch to say the ECB believes in "sound monetary system".

The Obama Administration probably had little in way of choice but to back key sectors of the economy with public money after those sections blew fuses right at the end of the Bush Administration, or risk much greater damage.

I agree with you on that. Staggering deficits were inevitable to avoid collapse.

However, Obama has done nothing to tackle the long term monster in the room - entitlements and rampant defense spending. He had a commission get together, give out some prudent suggestions...only for him to completely ignore them.

Oh, and he put good money after bad in that quagmire known as Afghanistan.

Again, with Afghanistan, he inherited that war from the previous administration. It makes no sense whatsoever to abandon the place in total chaos -- they needed to make a worthwhile contribution to longterm stability in the country. But Afghanistan has for some time been cast-away from major economic and social interaction and trade. And the terrible cost to both sides has been in blood spilt. Only Afghanistan can really decide what its future will look like - proud as per centuries of yore, or tragic as per the last one.

Yes, he inherited it...what is your point? He decided to double down and waste more American blood and treasure on a lost cause. How long do you want us to be in there? We are just delaying the inevitable.

When we leave, karzai's government will collapse and the nation would be fragmented between tribal and ethnic groups. All of Karzai's inner circle have mansion built in Dubai (as well as other homes in Europe) waiting for the day when everything goes down. Guess who paid for all those mansion? We did, just as we indirectly fund the Taliban guerrillas who kill and terrorize large swathes of the Pashtun south.

On the surface, the populace is stuck between a predatory, corrupt, and worthless 'government' and stone age fanatics. In reailty, it is more complex that that. There there are all sorts of further divisions and tribal issues too complex for Afghans themselves to figure out. Add that all up, and you get a country and people not ready for western notions of 'stability', let alone modernity.

Because most of Europe is socialist. That never works. In the end it will always fail as people get lazy and won't work preferring free handouts from the 'social system'. Hence Greece, Spain, Portugal, Italy are all about to crash like America in the Great Depression and bring about a Global crash.

Wrong! It's because Germany refuses to print money in order to let the PIGS off the hook. America, on the other hand, has no such code of conduct. America does whatever it takes to get American financiers off the hook.

And eroding the savings of everyone else in the process, I might add. Have you paused to ponder the negatives of America's money printing binge? You are aware that it amounts to a transfer of wealth from savers to irresponsible spenders, don't you? It transfers wealth from the producer to the irresponsible consumer who spends a lot more than it can afford. Oh, you don't give a dam, right???? Sorry for bothering you with such little matters!

The above article gives us a synopsis of the various stages of gradual recovery in the US compared to the European counterparts.It does not give us the costs involved in public Debt reduction.The reason US public debt reduced is because of the high unemployment rate of 9.1percent maintained from 09 to 011. People were forced to reduce debt by default rather than an incentive by the government by way of hiking savings rate to encourage savings.Instead the easy money printing policy of the federal reserve did not work since both public and private sectors were highly leveraged.The result seems to be impressive since US economy is recovering faster but the cost involved is a Fiscal deficit of 15 trillion dollars which is 100 percent of GDP. The European Model is the Austerity model which is highly discouraging and negative since it stagnates growth and does not give confidence to its people. Even though countries like Greece and Italy are highly indebted,the private debt is not bad.The European leaders are focussed on Fiscal consolidation rather than easy monetary policy and reforms. They are more bothered about rating agencies and it's impact rather than giving confidence to its own people.

Even though both the US and European models are different,the impact would be minimal but it is the confidence of the people which drives higher spending and growth. The end result in both the cases would be a huge fiscal deficit which would take years to curtail.Right now the US seems to be better since it is focussing on growth rather than austerity which is bearing fruits. But the long and arduous process of Deleveraging is yet to begin.

Angela Merkel needs a big dose of Modern Monetary Theory right away! She needs to realize the painfully simple fact that a public sector deficit is by definition a private sector surplus, as the government is putting more money into the economy via spending than it is taking out of the economy via taxation. When there is an overindebted private sector, the public sector simply cannot pay down its debts without worsening the recession...and Greece/Spain/Italy/Ireland/UK are all proving this before our very eyes. ECB lender-of-last-resort-powers, Eurobonds, and fiscal transfers for everyone or bust!

America is recovering faster because a lot of the huge losses from the subprime crisis of 2008 were packaged as derivatives and sold on to European banks. A neat way for the likes of Goldman and Morgan to socialize the losses that resulted the from non-recourse lending rules that allowed American homeowners to walk away scot-free with the added bonus that they are socialized abroad!

Meanwhile, here in Europe we are paying the price in forced austerity cuts because our banks are bust. Of course, I cant prove this theory because of the lack of transparency in the banking sector which also means our banks are scared of lending to each other causing a lack of liquidity.

When you look at all the shady deals by Goldman and Morgan that have been exposed, my intuition tells me I am close to the truth.

Actually, among the main distributors of these packaged subprime mortgages were also the Deutsche Bank and the Swiss UBS via their London offices. There is criminal investigation of their activities underway in New York right now.

Actually, it doesn't matter what Jeff Goldblum and Morgan Freeman where doing in their Hollywood sets, because fringe European governments had their own mega public projects, and where borrowing quite a lot from Germany or at near German yields against a backdrop of much less productive economies. When growth paused even if it had been momentary, it would have been an epic horror flick anyway.

Codswallop. You have fallen for the media lies, hook line and sinker. Most of these countries(Greece a notable exception) government debt was under control pre-2008. Their government debt spiked massively in the years since as a result of the banking crisis which meant the bad private debt from housing/construction/derivatives became socialized. Europes failure is primarily down to a failure in the banking and private sector, coupled with a flawed single currency which doesnt allow struggling countries any room for manoeuvre. Yes, of course bloated welfare states need reforming but please dont try pinning the failure of the banking system on "mega public projects".http://krugman.blogs.nytimes.com/2011/12/29/european-fiscal-zombies/

Just wanted to add:
1) I find this article informative and the topic interesting;
2) the comments I made earlier was on what the author had pointed out in the post, "America has not managed much in the way of growth-enhancing structural reforms and has a long to-do list, from improving worker training to reining in health-care costs."

Except for wars, any changes requires a significant involvement of the government in the U.S. is painfully difficult and slow, largely due to the almost anti-anything-government (a.k.a anti-socialism by now with the conservatives) stance of the GOP.

Perhaps one bright spot in the long-term structural reforms in America is the beginning of a revival of the manufacturing industry, evident by the revival of the auto-industry. Worker re-training and reining-in healthcare cost will take years to decades, I am afraid.

The truth is: Government­s are not constraine­d by the amount of money they collect to spend. For sovereign money government­s which create money, the debt problem is a red herring. For example, if a person owes a mortgage of $350,000 on an annual income of $70,000 should he worry about his debt to income ratio = 5 yr ?The US debt to GDP is near 1 yr (100%).
Income taxes play a minor role in macroecono­mics. It has a role in income inequality and inflation control.
Govt "debt" is the same as private wealth. FACT! Two key equations in economics which apply to any system of govt:
a) Federal Deficits – Net Imports = Net Private Savings.A numerical proof of this is shown in figure 4 ofhttp://pragcap.com/resources/understanding-modern-monetary-system
b) Gross Domestic Product = Federal Spending + Private Investment + Private Consumptio­­n + Net exports.
All banks create money every time a loan is made. This is the fractional reserve (uncontrol­­led at the moment) banking. California is in the austerity mode because it does not have monetary sovereignt­­y, does not have a state bank and can spend only what it collects if federal govt enforces austerity on it.
USA has no problem creating more dollars and solving the problem except for the dysfunctio­­nal congress and their economic ignorance and incessant "debt hysteria". The GDP is equal to approximat­ely 5 times govt spending. Actual data is in
http://psh­­akkottai.­w­ordpress­.c­om/2011­/10­/16/us­-gdp­-vs-g­ovt-s­pend­ing-2 with no taxation involved andhttp://pshakkottai.wordpress.com/2012/01/14/debtgdp-yr-and-govt-spending...

In the US debt to income ratio is not 1 year, since the federal income is not 100% of GDP. The income of the federal government is slightly lower than 15% of GDP, giving a debt to income ratio of 6.7 years. When banks give out mortgages, they look at disposable income available for interest payments. Let's do that for the USA: Add in (or rather, subtract) non-discretionary spending (interest on debt, social security, medicare, medicaid, and in practice also defense and security spending) and the USA has negative income. That is, even if the USA cuts all other spending, like infrastructure, law enforcement, education, etc, it still has to raise taxes to obtain a balanced budget. And THAT requires a solid democrat majority in both houses and a democrat in the White House, i.e. it will not happen any time soon.

Also, your statement under a) Federal Deficits – Net Imports = Net Private Savings, while literally true (not allowing for monetization), is based on a misunderstanding of wealth and money. While it holds fiscally, it does not apply to wealth. Capitalism is based on the creation of wealth, not the creation of money. So, appreciation of equity (home improvement, business, stock portfolio) and production of durable goods can raise the net worth and wealth of individuals and the population at large while the state runs a surplus. For a long time that was so normal that people didn't even think about it.

By the way, GDP is 4.21 times spending, not 5. That means the federal government spends more than $1.50 for every $1 it collects.
And quantitative easing, i.e. the fed buying T-bonds, is equivalent to printing money, so congress may spout "debt hysteria" for the benefit of the dupes holding the bag (Treasuries and USD), but if it walked the walk, it would prohibit QE.